Big Bang Reforms HIGHLIGHTS: Nirmala Sitharaman announces MASSIVE Public Sector Banks merger
Public Sector Banks Merger HIGHLIGHTS: In order to boost the economy further and power it quickly towards teh $5 trillion mark, Finance Minister Niramala Sitharaman today announced an amalgamation of 10 public sector banks into four big banks.
Public Sector Banks Merger HIGHLIGHTS: In order to boost the economy further and power it quickly towards teh $5 trillion mark, Finance Minister Niramala Sitharaman today announced an amalgamation of 10 public sector banks into four big banks. After this, the total number of Public Sector Banks in the country will come down to 12 from 27 banks in 2017. Apart from this, the government announced Rs 55,250 crore upfront capital infusion in the PSBs. There were also some announcements related to bankers. Here are the Public Sector Banks Merger highlights:
1. $5 trillion economy
India is moving towards to a $5 trillion economy, the government has taken many steps to recover NBFCs.
2. Recovery in NPA, improvement in asset quality
The banks have recovered their loan recoveries, gross NPAs have declined and overall asset quality has also improved.
3. Merger of PSU banks
The merger of BOB, Vijaya Bank and Dena Bank was successfully done with positive results and now PNB, OBC and United Bank will be merged soon. While Aandhra, Union and Corporation Bank will also be merged. Indian and Allahabad Bank will be merged soon.
4. Big PSU will have 4 executive directors
Big PSU banks will have 4 executive directors and the non-official director in the PSU will play a role of Independent director.
5. CGM level officers will be brought from outside
CGM level officers will be brought from outside. Chief Risk Officer will be brought from private sector and the banking heads will have fixed working life.
6. our NBFCs have joined hands with PSBs for liquidity pusrposes
Four NBFCs have joined hands with PSBs for liquidity pusrposes. We need strong foundation for the overall growth of inancial sector.
7. Strong foundation for growth of financial sector
FM Sitharaman said, "We need a strong foundation for the overall growth of the financial sector."
8. No job losses
It was announced by the FM that there would be no job losses in this exercise to merge public sector banks.
9. Gross NPAs have improved
9. Gross NPAs at Rs 7.90 lakh cr as of March 2019, revealed Sitharaman.
10. Amalgamation of 10 PSBs
This process will amalgamate 10 public sector banks (PSBs) into four entities. After the amalgamation, only 12 PSBs will be left in India from the 27 earlier.